Often I speak with pharmacists who have gone the route of bringing in a pharmacy junior partner to eventually take over the pharmacy and things did not go well with it. This typically leaves a poor taste in the pharmacy owner’s mouth about this potential succession route.
One important thing to remember is that there has to be communication on how and when these transitions will take place. This is a partnership. If the junior partner is unclear of how the transition is going to take place, or the senior partner does not define the hurdles the junior partner must cross, there is potential for disaster.
For example, we spoke with a pharmacist in the last year who owns several stores. He decided to bring on junior partners to mange his stores with the expectation that they were going to buy into the stores in the near future. He never laid out a plan with specific actions that must happen for the transition to begin. The date that he was to begin transitioning came and passed, and the junior partners were angry because they were not getting the ownership interest promised, and he was still not sure if he had the right people or if he was even ready to transfer any ownership.
Another example is a pharmacist who hired a junior partner and set up specific “hurdles” for that person to cross before the ownership would begin to transfer. The junior partner never put forth any effort to jump these hurdles, and the senior partner knew that he had the wrong person.
This is a great way to continue on the legacy that pharmacists have spent much of their life building. Selling to a chain does not allow this legacy to continue. It just takes some forethought to make transition as seamless as possible.
A few suggestions for hurdles that may help the transition:
- Have the Junior Partner write a business plan for the pharmacy. NCPA has some sample business plans available on their website.
- Have the Junior Partner take a business and/or leadership class at the local community college.
- Have the Junior Partner take over certain managerial responsibilities and show they are capable of managing various operations in the pharmacy.
These hurdles should have suggested timelines, and communication should be open about how they will help the Junior Partner when he/she becomes the controlling interest holder.
